Property tax and dispute resolution

Property tax

In any business, location is important. In land-scarce Singapore, the acquisition of a business property brings along the burden of property tax, which may have considerable impact on your business bottom line.

Understanding how tax on business property is computed can help you plan efficiently and optimally for business expansion.

Stamp duty

In recent years, there has been much development in stamp duties: the introduction of seller’s stamp duty (SSD) in 2010, additional buyer’s stamp duty (ABSD) in 2011, and additional conveyance duty (ACD) in 2017. The highest marginal rate of buyer’s stamp duty (BSD) imposed in relation to residential real estate was also increased in 2018.

Transactions involving the sale of Singapore shares and Singapore immovable properties now attract stamp duty at rates ranging from 0.2% to 34.2%, which could be a deal-breaker if not properly managed.

Tax dispute resolution

Globalisation, volatility in economies, and changes to accounting rules and tax policies increases the tax risk exposure of companies. There is tremendous pressure to maintain or increase tax collections in a declining tax rate environment, while keeping tax administration costs low.

Many tax authorities are cooperating internationally on tax matters, exchanging information, and adopting a risk-based scrutiny approach. They are also strengthening and increasing tax collections, and improving enforcement of processes and procedures. As a result, many companies are dedicating more time and attention to coordinating and managing their tax affairs.

Our team is acutely and intimately familiar with Singapore’s property tax and stamp duty regimes. We also offer a proactive and coordinated approach to tax risk and dispute management.

Led by a tax veteran who holds qualifications in real estate and valuation, the team comprises seasoned tax practitioners, lawyers and accountants, many of whom are familiar with the Singapore tax system having previously worked for the Inland Revenue Authority of Singapore (IRAS).

We advise on all aspects of property tax as well as stamp duty implications. This includes aspects concerning the understanding of the annual value of properties, appropriate methodologies to determine annual value, and items chargeable to property tax and property tax relief.

Drawing on our experience and expertise, we can help design robust tax compliance controls and guide you on the effective management of tax disputes; efficiently employ resources to unlock value tied up in unresolved tax issues; and enable you to better manage your penalty exposure.

Property tax representations

• Negotiations with Inland Revenue Authority of Singapore to achieve a fair amount of property tax payable
• Appeals to the Valuation Review Board when settlement negotiations do not achieve the desired results

Application for relief/remission of stamp duty

• Transactions involving related parties
• Conversion of companies to a Limited Liability Partnership (LLP)

Application for remission of ABSD/ACD

• ABSD remission for real estate developers
• Where the immovable property is not used for residential purposes

Stamp duty dispute resolution

• Dispute on the applicability of SSD/ABSD/ACD
• Issues involving trust/ limited partnership/LLP structures
• Characterisation of lease, licence and service agreements

Computing and filing of stamp duty/review of agreements

• Transfer of Singapore shares
• Sale of Singapore immovable properties
• Lease of Singapore immovable properties
  

Advisory on Tax Governance and Control Framework

• Advise on the formulation of tax governance policies and transformation of tax function
• Manage risks through review of and improvements to processes and internal controls in place
• Validate effectiveness of tax controls/procedures and implement tax strategies

Advisory on management of identified specific tax risks

• Assist with applications for tax clarification or ruling to manage tax uncertainties
• Advise and assist with voluntary disclosure of non-tax compliance, as well as manage and liaise with IRAS on reduction of penalties (if applicable)
• Advise and assist with voluntary disclosure of non tax compliance and manage and liaise with IRAS on reduction of penalties (if applicable)

Advisory on tax disputes management

• Assist with queries from IRAS
• Negotiate an amicable resolution to and settlement of contentious tax issues
• Manage and respond to IRAS’ tax audits or investigations